GM exits autonomous driving, reallocates $35 billion to electric vehicles to compete with industry leaders
General Motors has officially pulled the plug on its Cruise autonomous vehicle division, signaling that competitors like Waymo and Tesla are now the real-deal leaders of this up-and-coming sector.
WHAT HAPPENED
From the start, Cruise's autonomous vehicle rollout highlighted the challenges of innovation in the AV space, and what can go wrong when no one is behind the wheel. After securing San Francisco operating permits in August 2023, GM's self-driving unit quickly faced scrutiny for its readiness to operate on public roads. Internal documents revealed troubling gaps in safety, with vehicles struggling to detect children or road hazards—basic functions critical to any AV system. Instead of addressing these shortcomings, Cruise reportedly relied on human workers to manually identify objects missed by the AI, raising questions about its preparedness.
Compounding concerns, vehicles were reported to run stop signs and make risky unprotected left turns. In October 2023, a Cruise vehicle tragically struck a pedestrian and dragged her for several blocks, allegedly mistaking her for a traffic cone. This incident led regulators to shut down Cruise’s operations, halting what had grown into a $5 billion experiment fraught with safety issues.
As a result of all this, Cruise has halted operations in multiple cities, including San Francisco, Phoenix, Houston, and Austin. CEO Mary Barra, likely relieved to get away as fast as he can from all this, stated, "A robotaxi business is not General Motors' core business." Moving ahead, GM is planning on developing partially automated driver-assist systems like Super Cruise and integrating Cruise's technical team into GM's primary operations, which include targeting 1 million EV units annually in North America by 2025, investing $35 billion in electric and semi-autonomous vehicles, and planning to convert 50% of manufacturing footprint to EV production by 2030 according to reports from Gm themselves.
Let's double-click on those efforts in the next section.
WHY IT MATTERS
GM going all-in on EVs and automation, pledging $35 billion to stay in the game as Tesla and Waymo dominated the narrative was always curious. But after the $5 billion Cruise meltdown that proved “detecting children” was apparently too advanced. it’s hard to ignore the irony in GM’s push for market leadership. The company’s ambitious promises of 1 million annual EV sales and cutting-edge battery costs ($70/kWh!) feel bold, but they also feel like the bare minimum to remain competitive in an industry rapidly tilting toward Silicon Valley.
Then there’s the Trump factor. GM’s frosty relationship with the President-elect dates back to the shuttering of Lordstown, Ohio, a move Trump took as a personal betrayal after promising workers their jobs were safe. With Elon Musk (and Tesla’s EV empire) seemingly a Trump favorite, GM could face regulatory roadblocks or exclusion from federal incentives under a second term. The stakes couldn’t be higher, and GM’s tenuous position opens the door for Tesla to widen its lead.
Tesla, meanwhile, is playing chess in the autonomous space while others fumble with checkers. Its fleet of vehicles doubles as a data-harvesting juggernaut, feeding miles of real-world driving data into neural networks that position the company miles ahead in safety and functionality. With FSD v12 ditching traditional programming for machine learning and Musk’s xAI deploying massive AI clusters, Tesla is building the infrastructure to dominate AI-driven industries for years to come.
Waymo’s advancements in autonomous mobility are nothing to overlook. The company now delivers over 150,000 paid rides weekly across San Francisco, Phoenix, Los Angeles, and Austin—far outpacing competitors’ limited pilot programs. After securing a $5.6 billion funding round in October, which valued the company at over $45 billion, Waymo has set its sights on Miami by 2025 and plans to expand its systems to handle even more complex environments than San Francisco and LA.
Waymo’s partnerships also reveal its larger strategy. Collaborating with Moove for fleet operations and integrating with Uber in cities like Austin and Atlanta highlights its push to become the default autonomous backbone for ride-hailing giants. With Uber’s massive user base and no pressing need to develop its own self-driving tech like GM, the partnership allows both companies to consolidate efforts rather than compete head-on. For Waymo, the future looks increasingly interconnected.
WHAT'S NEXT
The irony? Every Waymo win seems to send Uber and Lyft stocks into a nosedive. Case in point: on December 5, 2024, Uber’s stock dropped 9.6%, and Lyft’s fell 10.09% after Waymo announced its Miami expansion. The reason is simple—Waymo’s robotaxis are seen as direct competitors to traditional ride-hailing, offering a new, potentially safer, and cost-efficient alternative. And let’s be honest, the allure of shiny, futuristic tech (as long as it doesn’t drive anyone off a cliff) has a way of stealing the spotlight.
This isn’t the first time Waymo has spooked investors. Previous expansions into cities like Phoenix and Los Angeles triggered similar market reactions, underscoring the perceived threat to Uber and Lyft. Uber’s partnership with Waymo is, arguably, its smartest move to stay competitive. Meanwhile, Lyft is plotting its own autonomous path, leveraging Mobileye’s “Drive” tech and planning self-driving Toyota Sienna minivans with May Mobility in Atlanta by 2025. The autonomous race is far from over.